BOT to Deliver Third Rate Hike

[snoop1130]

 

BANGKOK (NNT) - The Bank of Thailand (BOT) is set to raise interest rates by another quarter-point on Wednesday (30 Nov) for a third straight meeting amid fragile growth and signs of easing inflation has started to ease.

 

The widely-expected move to raise the benchmark one-day repurchase rate by 25 basis points would bring it to a modest 1.25%.

Thailand’s economy is not expected to return to pre-pandemic levels until early next year as its vital tourism sector, which makes up about 12% of output, begins gradually rebounding.

 

With the slowest pace of inflation in six months in October, helped by government measures to ease the cost of living, BOT Governor Sethaput Suthiwartnarueput said it is not necessary to aggressively increase rates to manage inflation like in other countries.

 

The U.S. Federal Reserve has increased rates by 375 basis points so far in this cycle, with 75 basis point moves at the last four meetings and another 50 due in December.

 

Despite the wide interest rate gap, the baht has been one of the top performers in emerging market currencies, depreciating only about 7% so far this year.

 

External pressure on the BOT to be more assertive with rate hikes has also eased after the recent retreat in the dollar. Capital inflows have meanwhile returned to its domestic bond and equity markets in the month-to-date, with the decline in foreign exchange reserves starting to reverse.

 

A weak currency is generally considered positive for the tourism-dependent Thailand economy.

 

The government hopes to see tourism next year reach 80% of pre-pandemic levels. 40 million tourists visited Thailand in 2019.

 

Source: https://thainews.prd.go.th/en/news/detail/TCATG221128134700828

 

-- © Copyright NNT 2022-11-28

 

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[stoutfella]

A third rate hike, that's a bit downmarket. Why couldn't it have been a first rate hike?

[RichardColeman]

And reports on the same page saying exports are down and looking bad, rate hike will just make Thailand even less competitive

[mikebell]

Does that mean my 800K will earn more?

[jacko45k]

1 hour ago, mikebell said:

Does that mean my 800K will earn more?

Yes.... minus the withholding tax of course. 

[nigelforbes]

1 hour ago, RichardColeman said:

And reports on the same page saying exports are down and looking bad, rate hike will just make Thailand even less competitive

It would make no sense to leave Thai interest rates at 1% when USD rates are headed for 5%+, that would just kill capital inflows stone dead. The game is to keep up with the Joneses whilst managing inflation, the quarter point won't do anything for exports, either way.

[worgeordie]

 Still well below inflation , the value of your cash is just melting away,

Cash used to be King ,now its a liability ...☹️

 

regards worgeordie

[Cake Monster]

16 hours ago, snoop1130 said:

With the slowest pace of inflation in six months in October, helped by government measures to ease the cost of living, BOT Governor Sethaput Suthiwartnarueput said it is not necessary to aggressively increase rates to manage inflation like in other countries.

Other Countries have already factored into their Inflation rates the massive rise in energy costs for Electricity Generation Etc.

This has not come to full fruition in Thailand, as there are more massive Electricity rises planned for the New Year, which will domino into the Inflation rate

I think everybody that lives here will say that the reported Inflation Rate is nowhere near the true rate, and is closer to 10 % than the published 6.7 %

Gas + 30 %

Electric + 35 % ( so far this Year )

Eggs + 30 %

Pork over 60 %

Chicken over 50 %

Haircut + 20 %

The Inflationary rises are very big and across the board, AIMHO, the BOT have been at the same dream pipe as TAT